Which Statement Regarding the Corporate Valuation Model Is NOT Correct

question 11

Multiple Choice

Which statement regarding the corporate valuation model is NOT correct?

• A)The corporate valuation model can be used both for companies that pay dividends and those that do not pay dividends.
• B)The corporate valuation model discounts free cash flows by the required return on equity.
• C)The corporate valuation model can be used to find the value of a division.
• D)An important step in applying the corporate valuation model is forecasting the firm's pro forma financial statements.

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Definitions:

Discrete Random

Refers to a type of random variable that can take on a countable number of distinct values, such as whole numbers, but not fractions.

Number Of Customers

The total count of individuals or entities that purchase or use a company's products or services.

Gender Of Customers

A demographic variable referring to the classification of customers based on their gender identity, often used in market research for segmentation and analysis.

Default

A failure to fulfill an obligation, especially failure to meet a financial obligation like a loan repayment.